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U.S. Wheat Condemns Australian Wheat Board

At its winter board meeting in San Antonio Saturday, the U.S. Wheat Associates condemned the actions of the Australian Wheat Board, which made illegal payments to the country of Iraq in support of the Saddam Hussein regime.

In a report to the U.S. Wheat Board of Directors, President Alan Tracy says Saddam Hussein's government paid "extravagant prices for AWB wheat at a time when the U.S. was shut out of the market."

The money, Tracy adds, amounted to millions of dollars directly into Hussein's pocket, "at the exact time that Saddam was trying to shoot down U.S. pilots who were patrolling the no fly zones."

The scandal has been front page news in the U.S. and throughout Australia, as investigations show that secret financial arrangements between the AWB and Hussein's regime accounted for more than 14% of illicit payments made to Iraq in connection with humanitarian purchases under the Oil for Food Program between 1999 and 2003. As the Australian government investigates the allegations, the AWB chairman, Andrew Lindberg, resigned from his position Feb. 9.

"Folks, this is serious stuff. A wheat company was the largest source of kickbacks to Saddam Hussein's regime under a humanitarian program," Tracy says. "Kickbacks that NBC reported could be funding insurgent attacks against our soldiers. And Australian soldiers."

The United Nations conducted its own investigation into the scandal and discovered that, "AWB's kickbacks were funneled through exorbitant inland transportation fees paid by Alia Transport, a company which was partially owned by the Iraqi government and which, in fact, did not transport the AWB wheat," Tracy says.

Furthermore, former AWB employees in December told an Australian reporter that AWB paid millions of dollars in kickbacks to Pakistan, Indonesia and Yemen prior to the Iraq scandal, Tracy reported.

The Australian Wheat Board, Ltd. operates a 'single-desk' wheat-buying system, meaning that if a mill wants Australian wheat, it simply contacts the AWB, which has been granted "a monopoly by the Australian government, so that they can control the wheat export market," explains Dawn Forsythe, director of public affairs for U.S. Wheat Associates. In contrast, the U.S. wheat is sold by private businesses to buyers throughout the world. The U.S. Wheat Associates helps foreign buyers by providing information and assisting purchases. It is funded in part by USDA and state wheat checkoffs. 

Because of AWB's monopoly status, it is impossible to tell whether the AWB trades wheat fairly, Tracy explains. "When U.S. Wheat Associates complains, often emphatically, about AWB Ltd., it isn't because we dislike Australians, it is because we are frustrated at AWB's continuing ability to work outside the norms of global competition to directly undercut U.S. wheat sales and hurt American farmers. Simply stated, we want fair trade with honorable competition."

The AWB has established a wholly owned U.S. subsidiary in Portland, Ore., called AWB (USA) Ltd, which is subject to U.S. laws and regulations. As such, Tracy says the AWB is subject to U.S. laws and regulations and should be subject to U.S. actions, including suspending the AWB monopoly from participating in the U.S. futures markets; barring the AWB from access to U.S. government credit programs and prohibiting the AWB from using U.S. Export-Import Bank programs.

U.S. Wheat's Board of Directors passed a resolution asking for the U.S Congress, the State Department, the Justice Department, the Export-ImportBank and USDA to investigate AWB's actions and take "whatever actions are necessary to protect the integrity of U.S. market development and export programs."

In short, "we want the monopoly dismantled," Forsythe says.